Secured loan is a kind of loan in which the borrower pledges some assets as a security to get some loan. It becomes a secured loan for the creditor secured against the collateral. A secured loan is the easiest way to acquire credit for setting up a new business or for any other project in the U.S.
Why is a secured loan the right answer?
The interest rates on Secured rates are lower in U.S. as compared to the unsecured loans. They also have higher borrowing limits with no restrictions on the purpose you may use the loan for. For example, the largest credit union in the U.S., Navy Federal Credit Union, offers secure loans at an interest rate of 8% lower than the unsecured loans.
Secured loans in the U.S. can be availed at an amount equal to the balance in the customer’s deposits accounts or according to the need of the customer. The payment terms are also flexible and can be structured as “interest-only”. If you are unable to pay the loans, the US banks will seize your property to avail the money back.
Other than this, secured debts are not included in bankruptcy. Your loan cannot be terminated by a creditor just because you file a bankruptcy. In the U.S. for instance, a total of 5 Billion activities of secured loans take place annually by the loan companies and nearly 3.5% of the US households take benefit of the secured loans.